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Case Study 1. New HR Strategy Makes Lloyd’s A “Best Company”
After a mere 320 years in business, the iconic global insurer Lloyd’s of London finally set out to establish its first true HR strategy, starting with the hiring of HR Director Suzy Black in 2009. “I was brought in to transform the HR function from one modeled on an old-style personnel office to a function that is more cutting edge, business focused, and value adding,” says Black.

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Black’s first order of business was to evaluate the current state of affairs, particularly how the corporation’s senior managers perceived the HR role. With this information in hand, Black and her team began to develop an overarching strategic agenda as well as specific tactics, addressing everything from recruitment to performance management to basic policies to rewards and compensation. Early on, Black admits, her main priority was simply “getting the basics right,” an objective that was made more challenging by the global reach of the company that demanded flexibility and variation to meet the needs of all Lloyd’s employees while still benefitting the company.

Changing long-time employees’ perception of HR then took a bit of convincing, but employees quickly began to recognize the value of Black’s actions. Through repeated presentations, employees worldwide grew to appreciate Black’s insistence on transparency regarding the nature of the employer/employee relationship. Gradually, they could see how the HR strategies were effectively creating conditions in which they could develop in their careers, be successful, and find meaning and value in their work. Today, Lloyd’s employees list the company’s challenging work environment, healthy incentive programs, and meaningful community outreach programs among the key reasons they enjoy working for the insurance giant.

And Black’s efforts are now gaining recognition outside the firm, positioning the company as a desirable place to work. In 2011, Lloyd’s landed on the sunday Times Top 100 Best Companies to Work For (in the UK) list and was hailed as one of the UK’s Top 40 Business Brands by an independent researcher. Black emphasizes that the transformation was a companywide effort, and Lloyd’s CEO Richard Ward adds, “I believe Lloyd’s to be an inspiring and rewarding place to work and am pleased that our staff agree. I am extremely proud of the achievements of the corporation over the last 12 months and thank all Lloyd’s employees for their continuing dedication, commitment, and professionalism.”

Ironically, this leadership position is the first HR position Black has ever held, having risen through the ranks in other arenas in business. But her experience has given her a clear definition of the ideal characteristics of the HR professionals of the future. Black says they must be commercial, challenging, and focused on delivery and excellence. “They must understand change and transformation, excel at operations, and balance tactical and strategic thinking and acting.” She adds, “They will have to be able to manage and navigate organizational complexity and ambiguities and not be afraid to say no occasionally in order to establish appropriate boundaries with the business.”

What skills does Black think employees need to work successfully in the area of HR?
What are some of the outcomes of the company’s new HR strategy?
What do you think might be some of the challenges of establishing HR policies for a global company?
What types of situations do you think might require an HR manager to say “no”?

Case Study 2. Misplaced Affections: Discharge for Sexual Harassment
Peter Lewiston was terminated on July 15, 2008, by the governing board of the Pine Circle Unified School District (PCUSD) for violation of the district’s sexual harassment policy. Prior to Lewiston’s termination he was a senior maintenance employee with an above-average work record who had worked for the PCUSD for eleven years. He had been a widower since 2003 and was described by his coworkers as a friendly, outgoing, but lonely individual. Beverly Gilbury was a fifth-grade teacher working in the district’s Advanced Learning Program. She was twenty-eight years old and married and had worked for PCUSD for six years. At the time of the incidents, Lewiston and Gilbury both worked at the Simpson Elementary School, where their relationship was described as “cooperative.” The following sequence of events was reported separately by Lewiston and Gilbury during the district’s investigation of this sexual harassment case.

Gilbury reported that her relationship with Lewiston began to change during the last month of the 2007–2008 school year. She believed that Lewiston was paying her more attention and that his behavior was “out of the ordinary” and “sometimes weird.” He began spending more time in her classroom talking with the children and with her. At the time she did not say anything to Lewiston because “I didn’t want to hurt his feelings since he is a nice, lonely, older man.” However, on May 25, when Lewiston told Gilbury that he was “very fond” of her and that she had “very beautiful eyes,” she replied, “Remember, Peter, we’re just friends.” For the remainder of the school year, there was little contact between them; however, when they did see each other, Lewiston seemed “overly friendly” to her.

June 7, 2008. On the first day of summer school, Gilbury returned to school to find a dozen roses and a card from Lewiston. The card read, “Please forgive me for thinking you could like me. I played the big fool. Yours always, P.L.” Later in the day Lewiston asked Gilbury to lunch. She replied, “It’s been a long time since anyone sent me roses, but I can’t go to lunch. We need to remain just friends.” Gilbury told another teacher that she was uncomfortable about receiving the roses and card and that Lewiston would not leave her alone. She expressed concern that Lewiston might get “more romantic” with her.

June 8, 2008. Gilbury arrived at school to find another card from Lewiston. Inside was a handwritten note that read, “I hope you can someday return my affections for you. I need you so much.” Later in the day, Lewiston again asked her to lunch, and she declined saying, “I’m a happily married woman.” At the close of the school day, when Gilbury went to her car, Lewiston suddenly appeared. He asked to explain himself but Gilbury became agitated and shouted, “I have to leave right now.” Lewiston reached inside the car, supposedly to pat her shoulder, but touched her head instead. She believed he meant to stroke her hair. He stated that he was only trying to calm her down. She drove away, very upset.

June 9, 2008. Gilbury received another card and a lengthy letter from Lewiston, stating that he was wrong in trying to develop a relationship with her and he hoped they could still remain friends. He wished her all happiness with her family and job.

June 11, 2008. Gilbury obtained from the Western Justice Court an injunction prohibiting sexual harassment by Lewiston. Shortly thereafter Lewiston appealed the injunction. A notice was mailed to Gilbury giving the dates of the appeal hearing. The notice stated in part, “If you fail to appear, the injunction may be vacated and the petition dismissed.” Gilbury failed to appear at the hearing, and the injunction was set aside. Additionally, on June 11 she had filed with the district’s EEOC officer a sexual harassment complaint against Lewiston. After the investigation, the district concluded that Lewiston’s actions created an “extremely sexually hostile” environment for Gilbury. The investigative report recommended dismissal based upon the grievous conduct of Lewiston and the initial injunction granted by the Justice Court.

Evaluate the conduct of Peter Lewiston against the EEOC’s definition of sexual harassment.
Should the intent or motive behind Lewiston’s conduct be considered when deciding sexual harassment activities? Explain.
If you were the district’s EEOC officer, what would you conclude? What disciplinary action, if any, would you take?

Case Study 1. Job Candidate Assessment Tests Go Virtual
When it comes to preemployment tests, companies are not necessarily just handing candidates a pen and a pencil or having them answer multiple-choice questions via a computer or phone anymore. A small but growing number of assessments have gone virtual. The assessments, which often conducted via the computer or the web, simulate a job’s functions. You can liken them to video games but within a work setting. Toyota, Starbucks, the paint maker Sherwin Williams, and numerous financial firms such as SunTrust Bank, KeyBank, and National City Bank have successfully used virtual job simulations to assess applicants.

At Toyota, applicants participating in simulations read dials and gauges, spot safety problems, and use their ability to solve problems as well as their general ability to learn as assessed. The candidates can see and hear about the job they’re applying for from current Toyota employees. National City Bank has used virtual assessments to test call-center candidates and branch manager candidates. Call center candidates are given customer-service problems to solve, and branch manager candidates go through a simulation that assesses their ability to foster relationships with clients and make personnel decisions.

The virtual assessments tools, which are produced by companies such as Shaker Group Consulting, Profiles International, and others do not come cheap. But although they can cost tens of thousands of dollars, larger companies that can afford them are saying they are worth it. The benefits? Better qualified candidates, faster recruiting, and lower turnover among employees hired. KeyBank says that by using virtual testing tools, it realized savings of more than $1.75 million per year due to lower turnover. Toyota began using computer-based assessments in the early 2000s, which have been so successful the company has since rolled them out to its other plants around the world.

Candidates also seem to like the assessments because they provide a more realistic job preview and make them feel like they are being chosen for jobs on more than just their personalities or how they performed during an interview. “It was a very insightful experience that made you think about what exactly you like and dislike in the workplace and if you really enjoy helping customers and have patience to do so,” says one candidate tested for a customer service job. It is not just Gen X or Y candidates who have played a lot of video games who like them either. “We haven’t seen any adverse impact,” says Ken Troyan, SunTrust Bank’s chief staffing officer. “There’s some mythology—if you will—about older people not being computer-savvy, and that’s just not so.” One study found that the simulations also tend to result in less of a gap between minority and white candidates than when paper-and-pencil tests are used.

HR experts warn that companies need to be sure they are not simply buying glitzy simulations that do not translate well to the jobs for which they are hiring. Also, the screening tools could potentially eliminate candidates who have trouble with simulations or computers but might make good employees. You should still use the U.S. Department of Labor’s “whole person approach” to hiring, says one HR professional. The “whole person approach” factors in the results of a variety of accepted tests along with prior actual performance and interview results to get the most complete picture of an employee or candidate.

What do you think are the prime advantages and disadvantages of “virtual tryouts”?
Do you think there would be any EEO concerns regarding this system?
Do you think virtual job tryouts might be better suited for some jobs than others? If so, which ones?

Case Study 2. Appraising Employees at the San Diego Zoo
More than 3,000 people work for the Zoological Society of San Diego, a nonprofit organization that operates the San Diego Zoo, the San Diego Zoo’s Wild Animal Park, and San Diego Zoo’s Institute for Conservation Research. The people who work for the society are not quite as varied as the 800 species of animals the society deals with, but they do represent a wide cross section of all sorts of employees. They include everyone from veterinarians and scientists to food service personnel and security staff.

For years the society had used a paper-and-pen system to evaluate employees. However, there were no consequences if a supervisor did not bother to complete his or her reviews and submit them to HR. Enter Tim Mulligan, the society’s new HR director. “The old review process was spotty at best,” says Mulligan. “There were managers within the organization who had not received reviews in ten years,” says Mulligan. There was simply no way to monitor whether the reviews were getting done and more importantly, there was no understanding by employees or managers of the need for them, says Mulligan.

Mulligan wanted to change the situation. He wanted the society and its managers to set some goals for themselves and their workers and for people to be to be paid based upon those goals. “It’s hard to insist on accountability if there are no goals to hold anyone to,” he says.

Consequently, Mulligan put together a team to explore the possibility of adopting a performance management system. After some research, the team determined that the zoo needed a system that would:

Be easy to use, even for those with limited computer skills; many people in the company were leery of having to learn how to operate a piece of software, so this was a top priority;
Effectively link employee goals with the Zoological Society’s objectives;
Objectively measure employee performance so that it could be linked with compensation;
Better manage the process of tracking the review process; and
Contain a journal feature so employees could record their achievements on a year-round basis.
Eventually the society decided to adopt Halogen Software’s eAppraisal system. The software has built-in prompts that guide managers through the review process, and it frees HR professionals from the task of reminding managers that appraisals are due. The appraisal process can also be tailored to include multiple raters.

There was just one problem, the society had no goals. So, a second team of more than 200 managers was formed to establish goals and determine the key competencies that lead to a manager’s success in the organization. At the beginning of the year, each manager chooses five goals, at least three of which must be linked to the organization’s overall objectives. Those goals are based on everything from guest satisfaction to revenue. “The solution was not shoved down their throats by HR,” said Mulligan. “No matter what department you worked in, you had a vote on the competencies that were going to be included.”

Since implementing the eAppraisal systems, the appraisal completion rate has gone from about 50 percent to a full 100 percent. “At first, I think our employees found it hard to believe this was all really happening,” says Mulligan, “Seeing managers being held accountable for customer satisfaction, employee satisfaction, budgets, and training and development is helping to strengthen our organization’s employee accountability and to boost overall morale.” Nor is the human touch lost when it comes to appraisals. Performance appraisals must be delivered in person, and supervisors and their employees discuss the results as they review the appraisals together. An employee cannot just pull up his appraisal on the web and read it.

“People come to work at the Zoo and the Wild Animal Park because they believe in our efforts to conserve endangered species,” said Douglas Myers, executive director and CEO for the Zoological Society. “Tim has worked to ensure that this dedication is recognized and rewarded.”

Why do nonprofits such as the San Diego Zoological Society need an appraisal system if their goal is not to maximize their profits?
What do you think are the pros and cons of using a web-based appraisal system?
How do you the new appraisal system will affect employees and the types of employees who work at the zoo?

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